SIDs and LIDs: What Las Vegas Homebuyers Need to Know

Las Vegas SIDs and LIDs

Las Vegas SIDs and LIDs

Many newcomers to (and even residents of) Las Vegas are confused by the terms SID and LID.  Are they taxes?  Fees?  How do they factor into buying and selling homes in the area?  Why do some houses have them while others don’t?  

While all of Clark County benefits from Clark County property taxes, certain communities in the Las Vegas area have their own assessments to address their own, specific circumstances. 

Understanding SIDs and LIDs – what they are and why they exist – can help you make important decisions about buying and selling in Clark County. 

What are SIDs and LIDs in Las Vegas?

The acronyms SID and LID stand for: Special Improvement District (SID) and Local Improvement District (LID), respectively. 

These terms are levied by the city on districts in master-planned communities and used to collect additional taxes from properties within these districts.  Whether a district is designated SID or LID depends on the area of the valley it’s in.

For example, Summerlin and Skye Canyon are designated SIDs, while some districts in Henderson, like Green Valley and Seven Hills, are designated LIDs. 

On a practical level, the terms SID and LID refer to the same thing and are interchangeable. 

Why SIDs and LIDs Exist 

Much of the new construction in the Las Vegas area is done on undeveloped land.  When developers and builders want to break ground to expand available properties in an area, the city will install new infrastructure such as roads, curbs, lighting, sewer, and fire hydrants, among other things.  The city will pass these costs on to the developers who then need to decide what to do with it. 

Some developers will reimburse the city for placing the infrastructure, in which case they will increase the price of the property in their development, effectively passing the cost onto the consumer.  Other developers do not repay the city, which then levies a tax on the properties in the district to recoup the cost of infrastructure. 

Since the installation of roads, hydrants, and lighting is done before the properties are inhabited, it is useful to consider SID and LID taxes as payments on a loan taken out from the city to purchase local infrastructure. 

SIDs and LIDs: Buyers vs. Sellers 

Although some other parts of the country have similar arrangements, if you have never purchased a property in the Las Vegas area, it’s possible you’ve not encountered anything like an SID/LID before. 

The most important thing about SIDs and LIDs is that they are tax assessments that stay with the property.  Regardless of who owns the property, or for how long, SIDs and LIDs need to be paid semi-annually for a period of 10 – 20 years.

For homeowners, this is important because you do not need to pay them off before you sell.  Most realtors will recommend that you do not pay off your SID or LID because, since it’s not a capital improvement, it will not increase the value of your home.  Furthermore, there is often a penalty for early payoffs.  You would be better served by investing in the property itself.  

As a homebuyer who is new to Las Vegas, you should ask your real estate agent to let you know if your prospective home has an SID or LID, how much it would affect your monthly payments, and for how long.  

Since SID and LID payments essentially raise your total housing expenses, they may affect your qualification amount for a mortgage loan, so you need to factor them in during your search in the Las Vegas area. 

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